Short-Term & Vacation Rental Discussions

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Ken Latchers
  • Hatfield, PA
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Vacation rental - the second best way to use a property?

Ken Latchers
  • Hatfield, PA
Posted Sep 14 2019, 21:51

I am of the opinion the trying to do vacation rentals is no longer the best way to monetize a property. I am running an experiment with two buildings.

Airbnb and it's growth has strongly cause of decline in the bed and breakfast industry. Is my belief that in most places, vacation rentals will turn on each other with incredible Market saturation making it difficult to do well.

people talk about getting 20% annual return on a property in the Smokey's and elsewhere. And how great that is.

but a vacation rental dollar is not the same as a long-term tenant dollar.

3% credit card charge, software, insurance that can be two or three times more expensive and may be hard to get, the industry trend for listing sites to charge a commission to the owner such as booking.com at 15%, the fact that vacation rentals require self-employment tax, Linens and cleaners and maintenance people who have to keep it perfect, every possible kitchen appliance and coffee setups add toilet paper and soap and everything else, up to 30% to a property manager.

so maybe if you're lucky a vacation rental dollar is 75% of a long-term tenant dollar. So now you're 20% return is more like 15%.

not counting the increased restrictions by many municipalities, Market saturation by everyone jumping into the short term rental pool,  angst about reviews, unhappy neighbors, etc etc.

what if there was a better way? The more vacation rentals pop up the more demand there is for what I'm trying to do in some areas. That is the experiment I am currently involved in. No I'm not trying to sell anything. More to come.

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